Mutual funds are platforms that pool in a set of investors money and invest in stocks and securities for mutual benefit of all the investors and the fund as a whole. Mutual funds are of various types such as debt funds, equity funds, mix funds etc. Mutual funds usually invest in a variety of stocks and the same is difficult to be achieved by an individual investor. Investing in a variety of stocks provides stability of prices, safety of returns majorly due to diversification.
Also, mutual funds are governed by laws and regulations that assures the investors of safety and security. Since, mutual funds are able to pool in funds from a large group of investors they provide financial resources to a companies and entrepreneurs.